Speech to the Centre of Excellence in Population Ageing Research Public Forum on the Intergenerational Report

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Introductory remarks

Good morning and thanks John for that kind introduction.

I'm delighted to be here today to talk to the Centre of Excellence in Population Ageing Research (CEPAR) about the policy challenges and opportunities an ageing demographic presents for Australia

CEPAR have been strong advocates of the Government's recently released Intergenerational Report, and are equally passionate about the issues we have raised as part of this discussion.

It is important that we are passionate and continue to raise the profile of this issue, because Australia is on the verge of an ageing boom.

We are heading towards a new era, one which will present both challenges and opportunities for government, for business and society as a whole.

The Government started a conversation on this with the launch of the Intergenerational Report last month. And today I want to advance this conversation with you.

CEPAR has produced a large a body of work on how the population will change in the next 40 years, and how public policy will need to respond.

By collaborating with universities and centres of excellence such as CEPAR, we can together communicate the challenges and the policy choices we need to make.

I am pleased that this is an open public forum, so that all interested members of the wider community can listen to experts and participate in this conversation.

The Intergenerational Report

This audience knows well that Australians are living longer, healthier and more prosperous lives than ever before. This is great news.

We currently have one of the longest life expectancies in the world and the Intergenerational Report shows this will increase.

A boy born today will on average live to over 91 years of age, and a girl to over 93 years. A child born mid-century will most likely live closer to 100.

Our positive actions from the introduction of seatbelt laws, laws about drink driving, advances in treatments for heart disease and less people smoking, have dramatically improved our life expectancies.

This means that a greater proportion of the population will be aged over 65 in the years to come.

In fact, the number of Australians past the traditional retirement age of 65 is projected to more than double by 2055.

We will also see far more centenarians. In 1975, there were only 122 Australians over a hundred years of age. Today there are around 4,000.

And in 40 years' time there will be around 40,000 people aged over 100. That is a city the size of Queanbeyan, where everybody is over a hundred years of age.

These developments are profound and will affect Australia's economic future.

Our longer lives and demographic shifts mean there will be fewer people of traditional working age as a proportion of the population.

For every person aged 65 and over, there are currently around four people aged between 15 and 64. In 40 years' time, that number will nearly halve. As you can imagine, this presents some challenges for society and government.

The workforce participation of older workers

The IGR clearly shows that participation and productivity are vital to growth. And as our population shifts over time, we need to change the way we think about participation and productivity.

Over the next 40 years, economic growth is expected to be slower than the past 40 years.

So what the IGR actually shows, is that if we want things to change then we must change.

Workforce participation is not just about improved economic growth. Having the ability and choice to actively participate in the workforce can be central to an individual's self-esteem. It binds the fabric of a society.

I'm referring to participation by today's youth, participation by women —including those with a new family — and by older Australians.

We must create jobs and utilise the productive potential of the population.

We need to become more inclusive of diversity in the workplace if we are to make the most of our economy. And that means recognising the value of older workers.

As I said, there will soon be fewer people of traditional working age as a proportion of the population.

Interestingly, the IGR projects in 40 years' time that the participation rate of those aged over 65 will rise from 1 in 8, to 1 in 6.

A small shift, but a welcomed trend.

If older Australians want to work later in life, then they should be given the opportunities to do so.

If they wish to relax in their retirement, then they should be able to do so.

This is about choice and opportunity. Opportunities that have been provided by the significant changes that have happened in our society in the last four decades.

Changes in technology. Changes in mobility and access. Changes in health care.

Developments that can help people extend their time in the workforce. Australians are living longer, but their life expectancy is matched or even exceeded by the increases in healthy life expectancy.

What this means is that we can generally grow older without needing help with activities such as aged-care, mobility or communication.

It means that many older Australians can now choose to keep working in a way they could not do just a few decades ago.

The value of older workers

This Government is resolved to reducing and removing the barriers to workforce participation facing older Australians.

It is a waste of a national resource for those people to drop out of the workforce, when they still have a desire to work and a positive contribution to make.

Because, as I'm learning as I get older, that wisdom comes with age.

It doesn't come through the words of others; it doesn't come through the air conditioning system at a university; and it doesn't come through the mail.

Wisdom comes through life experience — it's not something that can be bought.

In the past, we weren't always able to make the most of this wisdom and experience, because life expectancies and healthy life expectancies weren't as good.

But now many older Australians have the choice to extend their participation in the workforce.

Improvements in health and living standards have helped with that, along with the rise of less physically demanding work and new technologies.

This is good for the individual and good for the country.

By remaining in employment for longer, older Australians can both increase their current income and save more to support themselves in retirement.

There are also studies that show attachment to the workforce can help maintain social inclusion and improve health outcomes over time.

This adds to the quality of life for older Australians.

The increased workforce participation of older Australians is a good thing for the nation.

Because greater mature-age participation and employment means higher household incomes for mature-age workers and across the Australian economy as a whole.

In last year's Budget, the Government announced that it was introducing its Restart Programme. The Restart Programme encourages businesses to employ Australians 50 years and over.

It provides a clear and long-term financial incentive for employers to give older Australians a fair go and keep them on the payroll. Restart gives employers up to $10,000 for every person employed under this program.

We will continue to encourage businesses to recognise older Australians.

We may need to help some employers change their attitudes about older employees. Or to change workplaces to become more flexible so that older workers are more able to work.

Whatever the case, we cannot afford to let this large talent pool go to waste.

It's not just the wisdom, skills and experience of older Australians that can benefit employers; they also contribute maturity and stability to workplaces.

Older Australians are of immense value. And while our participation rates of mature workers have increased sharply over the last decade, we can do better.

We are still behind the United States, Canada and New Zealand.

This Government is looking at the steps we can take to improve this, and I welcome the thoughts and contributions of CEPAR, and all of you here today, on this important issue.

Closing Remarks

We obviously can't guarantee what Australian life will look like in the decades ahead. But the Intergenerational Report provides us with a glimpse of what lies ahead.

And while there is still a lot we cannot foresee, there are some things we can be assured of.

We will have an ageing demographic profile. There will be pressures on the Government's budget and the delivery of services.

So we need to be prepared, and we need to start today.

Inaction today doesn't delay the costs, it only compounds them for future generations.

This will require some reform, but all reform needs communication and broad participation.

We will all have a role in promoting a broader understanding of the implications of population change, for participation, for productivity, and for our economy.

We will need to promote public understanding on the value and contributions that senior Australians can and will make.

I hope my words here today have given you food for thought as you consider the challenges and opportunities that Australia faces in the years ahead.